The news: AstraZeneca struck a deal with AI company inistro worth up to $1.5 billion to find drug targets for liver and heart diseases. AstraZeneca will pay $40 million upfront, with the remainder tied to development and commercial milestones.

Insitro’s AI will use data from both companies to better understand the underlying causes of metabolic dysfunction-associated steatohepatitis (MASH) and cardiomyopathies. AstraZeneca will select promising targets, which insitro will develop into potential drug candidates.

Why it matters: AstraZeneca is adding an earlier-stage approach to drug discovery amid a wave of pharma AI partnerships. AI use in early target identification remains much less common than in later drug discovery, per IQVIA's May 2026 R&D trends report.

AstraZeneca is turning to AI to bolster its cardiometabolic pipeline. Since late 2024, it has licensed cholesterol, obesity, and AI-driven discovery programs from China’s CSPC, including a $1.2 billion upfront payment in January. It also bought AI company Modella in January to incorporate its AI platform and agents into AZ’s oncology drug development.

Implications for pharma companies: The surge in AI drug discovery deals puts more pressure on pharma companies to demonstrate results. AI-based target and drug discovery licensing deals reached $47.1 billion in H1 2026, per DealForma, surpassing the $44.6 billion recorded in FY 2025. But those headline values often depend on development and commercial milestones that may never be reached, and no AI-discovered drugs have yet been approved by the FDA.

For pharma companies, AI target discovery offers another way to build long-term pipelines, but doesn’t address immediate revenue pressures. Balancing early stage AI partnerships with licensing or acquisitions of drugs further along in development can help companies invest in future treatments while addressing nearer-term pipeline and revenue needs.

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